Sunday, October 13, 2013

Millennials Aren't All That

Louis B Shrimperton III "LB3"


I have a large degree of respect for Tom Wark's dog Louis B. Shrimperton III. "LB3" as he likes to be called, serves as Tom's sounding board when Tom writes his daily blog and he's also a Millennial with a distinctive opinion. Having descended from the Flying Nun as you can clearly see by the above resemblance, he's able to give Tom a high-level perspective on things.

On rare occasions Tom writes an interesting blog and he did so this last week writing "Unsubstantiated: Millennials, Wine & the Meme." Tom addresses a pet peeve of mine when reporters and writers repeat equine excrement in what I've referred to as the Millennial Myths. That's the notion that Millennials are driving the wine business. Here's one quote from a newspaper article I cited in a recent blog I penned:
"the U.S. ranks third in total wine consumption, and is gaining rapidly on the leaders. Much of the (3.3% ~ 850,000 case) increase can be attributed to the Millennial generation"
The problem with this quote and an unending string of others ..... they just aren't real or helpful in describing wine business opportunity.

Here's reality:
  • The Millennial Generation even today, represents only around 15% of total wine consumption.
  • Millennials are drinking inexpensive wine.
  • Millennials may or may not be any different than the generations in front of them when it comes to wine drinking.
  • Millennials aren't in their prime spending years and have no wealth or earnings.
Large wine company's selling cheap wine should be marketing to Millennials. Fine wine producers will need to cater to them when they are 35-55 years old and in their prime spending years; not because they are Millennials. The reason to market to them will be because they want and can afford fine wine.

Really something gets lost in the discussion of cohorts: They aren't measured by when they were born. The number of years of each cohort vary by as much as 100%. The cohorts are defined and measured by factors demographers apply over different era's and time periods that "they" think link a generation. Gen X'ers for example are a 10 year cohort while Millennials are about a 20 year cohort. Boomers were a huge birth bubble but Millennials ..... they aren't all that. As a percentage of the population, they are vin ordinaire

The following animated gif courtesy of Calculated Risk demonstrates this important point.

Age Shifts in US Population

Starting in 1950, the chart shows how the US population has evolved. You can see how the wave of Boomers has dominated the US population and how that wave has swept through the decades. They hit those those prime spending years of 35-55 in the 1990's - which not coincidentally was the same time the consumption of wine really took off. 

What about Millennials? Where is that wave? Well ..... there is no wave. We are moving to a period which will have the over 70 age group as the largest, and the rest of the population pretty well disbursed evenly. The Boomers were every marketers best case scenario when that happened. The Millennials wont be. That's just a fact, not an opinion.

Where should the US Wine Business be marketing? Its a pretty easy answer: To whoever will buy their wine. Its not the 70+ cohort because they will consume less even if they can afford it. Its not the Millennials because they can't afford it. Its the Boomers and the forgotten Gen X.

I've been encouraged by recent remarks from the Wine Market Council who is altering their historic evangelical pro-Millennial message:
"Lets get the Industry to focus on high-frequency wine drinkers." (Consumers who are responsible for more than 90% of all high-end wine sales and 40% of all 750ml wine purchases between $10-$20.)
"While Millennials are increasingly important customers, when one looks at the total dollars spent on wine, it's still heavily skewed toward Boomers.... If one is concerned about dollars, Baby Boomers perhaps shouldn't be excluded from one's marketing efforts."
Its a double negative, but I think the Wine Market Council is saying Boomers should be included in one's marketing efforts. That's progress but the argument I've held for years now is the Gen X'ers are the ones being left out of the conversation and yet, they represent the second largest demographic consuming wine today. So what about marketing to Millennials? I suggest you wait until they might have the willingness and capacity to buy the product you produce. I've checked back with LB3 and he tell's me from a high-level, I have an excellent view of the landscape of Millennials. I would have talked a little longer to him, but he just took off.

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